Sometimes, however, ethics scandals are just a bunch of trumped-up hooey designed to generate headlines no matter what the personal cost, and that’s exactly what we see unfolding today. The protestors, bloggers, and GOP aides trying to smear Senators Chris Dodd and Kent Conrad right now should be ashamed. Dodd and Conrad are two of the most honorable people in Washington, DC, and I do not for an instant believe either one knowingly or purposefully did anything wrong. This is especially true of Conrad, who has been a model of honesty in the way he has handled this scandal.
The gist of the scandal boils down to this: Dodd and Conrad each received special treatment from Countrywide Financial when financing mortgages, but were not told about their discounts. The moment Portfolio.com reported this scandal, some bloggers began calling for the two men to resign their Senate Chairmanships (Dodd=Banking, Conrad=Budget). This morning, a large group of activists were outside DC’s Union Station, passing out literature housing bailout literature. They were accompanied by someone in a bunny suit (a play on Dodd’s hare/hair campaign) holding a large sweepstakes-style check made out to Dodd for $75,000.
My guess is that before this scandal leaked, many of these critics had never even heard of Dodd or Conrad. All they know is that the mortgage rates weren’t right, so investigations bedamned, let’s get ‘em!!! Such fools should be ashamed of jumping to conclusions, for they are unfairly tarring the reputations of good men.
Dodd was my second choice for President during the early stages of the Democratic primary. I’ve met him a few times, and while he may have a bit of an ego, he also has a bit of a conscience. His mortgage scandal is that when he refinanced homes in Connecticut and DC, Countrywide gave him slightly discounted rates for a total of $75,000 in savings. The Hill newspaper reported today that Dodd was aware Countrywide had given him VIP status, quoting him and reporting,
"'We knew at the time that we were being dealt with within a special section of the company. We really just assumed it was a courtesy, because we had an existing mortgage with them — two mortgages with them.'
He noted that he and his wife, Jackie Clegg, were pre-existing customers with excellent credit. Clegg assumed that they were merely going to receive more attentive customer service, Dodd said."
Why do I find this so believable? Because Travelocity.com named *me* a "VIP" for flying through them so often, and as a result I receive more attentive customer service! (This was before I jumped ship to Southwest, of course.) What Clegg and Dodd assumed is exactly what I would have assumed in their shoes. In fact, I considered titling this post "Because I'm a VIP, too." Furthermore, how were they supposed to know they were getting good rates? There is no record they were ever informed of their $58,000 and $17,000 discounts, and as those numbers are only fractions of their overall 4.25 and 4.5% rates, they can’t be expected to figure it out for themselves.
Conrad’s loan scandal is slightly different. Countrywide waived approximately $10,500 in fees when he refinanced a $1.07 million loan on his vacation home, and gave him a mortgage on an eight-unit apartment building. Countrywide, as a matter of policy, does not give such loans to buildings of over four units. Like Dodd, there is no way Conrad should know of company fees that weren’t charged to him or of company policies he wasn’t told about. Remember, these are Countrywide policies, not federal or state regulations. Conrad says he did not know he received special treatment until the story broke publicly last week. He is quoted in Roll Call today, “I did not ask for it, I didn’t expect it and I didn’t think I was getting anything special… All of this came as a big shock to me.”
Conrad should be commended for the way he has handled this issue. Not only did he pay off the apartment loan, he has donated the $10,500 to Habitat for Humanity and been in contact with the Senate Ethics Committee, something Dodd has yet to do (but promises cooperation if they contact him). Conrad says of the Ethics process that he “welcomes it very much,” and told Politico.com that he supports changing Senate rules that do not require mortgage disclosure. I’d call that awfully strange behavior for a man who purposefully did something unethical.
I have followed Conrad’s career for the past few years. While interning for Senator Max Baucus (D-MT) this spring, I worked with one of Conrad’s staffers and saw him in the halls and Farm Bill Conference Committee meetings on numerous occasions. The Farm Bill would not have passed if not for his behind-the-scenes leadership in bipartisan negotiation. Just when the bill looked dead, Conrad stepped in and made things happen. He is a quiet man but a hard-working orphan from rural America. A relative of mine said Conrad seems like a real intellectual, and he certainly seems to carry himself that way. Had his deadlines been more flexible, I would have applied for an internship in his office, too.
While I don’t believe Dodd did anything wrong, I do think he should take a lesson from Conrad. Conrad is being much more transparent and genuine, and while it is natural to act defensively when falsely accused, it would nonetheless behoove Dodd, who is in charge of Senate mortgage legislation, to show as much goodwill as possible right now and avoid even the appearance of a conflict of interest.
The real culprit in this case seems to be Countrywide, for trying to curry favors with Senators through special treatment and not telling them as much. If further evidence emerges that either Dodd or Conrad had prior knowledge of their treatment, I will be very disappointed, eat crow, and admit that I am wrong. I highly doubt that that will happen. These are good men who had a run of bad luck, and the fingers pointing at them should turn the other way around.